An image segmentation algorithm for segmentation-based video sequence coding is presented. The method uses a new criterion based on similarities in both motion and brightness. Brightness and motion information are incorporated in a single segmentation procedure. The actual segmentation is accomplished using a region-growing technique based on the watershed algorithm. It comprises the processes of extracting the initial regions called seeds and their growing by merging similar neighboring pixels. In addition, a tracking technique is used in subsequent frames to achieve a coherent segmentation through time. Simulation results show that the proposed method is effective in determining object boundaries not easily found using the static criterion alone.